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China epoxy resins producers cut run rates amid high BPA prices

10 July 2014 09:17
Source:ICIS News

SINGAPORE (ICIS)--Spot liquid epoxy resins (LER) prices in China climbed by 7.2% since early May to hit a near seven-month average high of yuan (CNY) 17,800/tonne on 1 July, on the back of soaring domestic feedstockepichlorohydrin (ECH) and bisphenol A (BPA) prices, market sources said.

In response to the high BPA prices, a few major local producers had cut their plant operating rates to 50-70%, market sources said.

The China epoxy resins industry average operating rate was used to be around 70-80% before the surge in raw material prices, according to market sources.

Moreover, the start-up of a new LER facility in south China by Sanmu Group in June is likely to intensify the competition among epoxy resins producers in an already saturated domestic market, market participants said.

While the other major epoxy resins producer in south China – Grace THW, focuses more on specialty epoxy resins production for the electronics sector, some impact on overall LER supply in the south China region is still expected, participants added.

Lackluster but largely stable local downstream demand for most of the year so far has checked further upside in LER prices despite soaring feedstock costs.

Some industry players, however, were more optimistic on the demand outlook in the seasonal epoxy resins peak season in the country from July to September.

Domestic epoxy resins consumption is growing at a gradual but controlled rate despite a slowdown in the Chinese economic growth this year, supported by demand from the developing end-user windmill sector, industry analysts said.

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